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Working women failing to save

30 March 2006

Over half of British women have neither a private nor a work-based stakeholder pension, according to a new study.

High street bank HSBC found that 60 per cent of women are not putting anything into a pension pot, while many are confused about their entitlements if they choose to stop working or only work part time.

Ian Martin, head of pensions and retirement income at the bank, is reminding women that others can pay into the schemes on their behalf if they are raising children.

"Stakeholder pensions are a great solution for women who have opted to take a career break while raising their children," he said.

"However, very few mums are taking advantage of the fact that they, their spouse or someone else can continue to pay into a stakeholder pension in their name even if they are not working."

Almost half (44 per cent) of the women interviewed incorrectly assumed they could only make pension contributions if they were actually working at the time.

Mr Martin said that the number of women failing to make pension contributions was "worrying", while many could be "risking poverty in retirement" as a result.

A woman paying £100 a month into a stakeholder pension could amass a retirement income of £165,000, but this would be reduced to £118,000 if no payments are made for five years.